UK regulator to push for probe into Amazon, Microsoft cloud dominance

By Martin Coulter and Foo Yun Chee

LONDON (Reuters) - British media regulator Ofcom will this week push for an antitrust investigation into Amazon and Microsoft's dominance of the UK's cloud computing market, according to two sources familiar with the matter.

Between them, Amazon and Microsoft enjoy a combined market share of 60-70% of Britain's cloud computing industry. Meanwhile, their closest competitor, Alphabet's Google, has closer to 10%.

Ofcom's push for an antitrust probe, first signalled in April, will remain in the body's final report on the matter, set to be published on Thursday, one of the sources said.

The watchdog previously said it had considered referring the market for investigation by the CMA, the British competition regulator.

Ofcom warned the current state of Britain's cloud computing market made it difficult for some existing customers to bargain for a good deal with their provider.

Technical restrictions and discounts encouraging customers to keep using a single provider for all their needs, even when better alternatives were available, could be considered anti-competitive, the body said in a report earlier this year.

"We are concerned that constraints on customers' ability to use more than one provider could make it harder for smaller cloud providers to win business and compete with the market leaders," it read.

Both Amazon and Microsoft previously said they would continue working with Ofcom ahead of the publication of its final report.

In response to Ofcom's earlier proposal, Microsoft submitted a 58-page response, stating an investigation could ultimately harm consumers.

“It would be a particularly unfortunate outcome if UK businesses and public sector customers faced less vibrant and competitive cloud solutions on a global stage than those available to their rivals in the EU, the U.S. and China," it said.

Amazon and Microsoft did not immediately respond to requests for comment on Tuesday.

A spokesperson for Ofcom said: "We will be announcing our decision whether or not to refer the market to the CMA by the statutory deadline, which is Thursday 5 October."

A spokesperson for the CMA declined to comment.

(Reporting by Martin Coulter and Foo Yun Chee; Editing by Matthew Scuffham and Susan Fenton)